Court approves price controls

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http://www.msnbc.com/news/915470.asp

 

Court approves drug price controls

 

WASHINGTON, May 19 — The Supreme Court on Monday gave a green light to a novel

state program to force drug manufacturers to lower prices on prescription drugs,

but warned that the program may not survive further court challenges. The 6-3

ruling was a defeat for drug makers who claimed that Maine’s program, called

Maine Rx, violates federal law.

 

THE PROGRAM, which has never taken effect, would use the state’s buying

power under the federal Medicaid law to cut drug prices by 25 percent for the

working poor, retirees and others who do not receive health coverage or drug

benefits through their jobs.

The Supreme Court’s ruling does not give Maine what it really wanted, an

unqualified endorsement of the drug plan. Instead, the high court said that drug

makers did not adequately show why the plan should be prevented from taking

effect. It has been on hold pending the court fight.

“By no means will our answer to that question finally determine the

validity of Maine’s Rx program,” Justice John Paul Stevens wrote in a unanimous

portion of the complicated ruling.

Only Justices David Souter and Ruth Bader Ginsburg fully agreed with

Stevens’ analysis of the potential benefits of the Maine program, but an

additional three justices agreed that the program should have a chance to take

effect.

 

Chief Justice William H. Rehnquist and Justices Sandra Day O’Connor and

Anthony Kennedy dissented on that point. They would have left in place a lower

court order blocking the program.

 

PROGRAM ALLOWS PRICE CONTROLS

Maine Rx, enacted in 2000, would let the state negotiate for lower prices

on behalf of more than 300,000 residents who pay for prescription drugs. If

prices didn’t drop in three years, the state could impose price controls.

Spending on prescription drugs has increased by 15 percent or more

annually in recent years, and more than two dozen states had urged the Supreme

Court to uphold Maine’s effort to hold down the escalation.

Supporters of the Maine program contend it is a response to years of

inaction in Congress, which has repeatedly tried and failed to add prescription

drug coverage to the federal Medicare program for the elderly.

Labor and retiree groups support the Maine approach. Twenty-eight states

supported Maine’s position. A dozen states had said they were poised to adopt

similar laws if the Supreme Court ruled in Maine’s favor.

 

CONSUMERS WELCOME RULING

Ray Simpson, 76, of Saco, Maine, said the Supreme Court ruling was a

relief. He said he retired in December and learned the hard way the costs of

paying out-of-pocket for prescriptions.

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“It was unbelievable when I had to pay my first prescription,” Simpson

said. His prescription for Lipitor went from $20 for a 90-day supply to $98 for

a 30-day supply. “You have to pay through the nose.”

Simpson’s wife, Carleen, was just diagnosed with breast cancer and

learned she must pay $210 a month for a new prescription. Carleen Simpson plans

to get the prescription filled in Canada, he said.

The Bush administration and business groups and conservative legal

organizations sided with the drug industry.

Some justices had suggested in January, when the case was argued, that

the dispute be resolved by a lower court or by the federal Department of Health

and Human Services, which oversees Medicaid. Medicaid, a joint program of the

federal government and the states, funds health care for the poor and disabled.

The Supreme Court left the door open for either step.

State officials have said the program simply does for one state what

other countries have done for all their citizens — force the drug companies to

bargain. Prescription drug prices are often much lower in Canada, in part

because of government price caps.

 

 

 

 

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